I'm in the fun position of getting to do some pie in the sky planning and advice giving. I certainly have my own opinions, but wanted to get ideas from the community.

Here's some useful facts:

the goal is not to fit a single company, but a group of companies, cultures, and jobs

probably paid, and the length of internship is largely set to accomodate school calendars.

technical work of varying types, stuff that fits well with an engineering or science type background.

My major focus is the management of the program - what groups can do to make sure their interns are succesful and their programs are well-regarded. I'd like to stay away from the nuts and bolts of negotiation that will vary from company to company.

So.. what are the must-haves and nice-to-haves in an internship and how would you prioritize them?

2 Answers
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Adequate management (on part of day-to-day managers) is critical. Many if not most interns will have minimal work experience prior to this assignment, yet, oftentimes, the tendency of managers is to treat them the same as a regular employee. "Here's work, come back when it's done." Most interns will be timid and unaware of basic business practices. At the risk of coddling, it is important for the intern day-to-day manager to maintain a much closer relationship, or at the very least, discuss with the intern their preferences. This is probably the #1 most important thing to creating an environment where interns are successful and enjoy their experience. They must feel comfortable discussing the good and bad things about their internship with their supervisor. A distant or non-engaging supervisor will not fulfill this role for most interns.

Meaningful work. If you want your program to have successful interns and be well regarded you need to ensure the interns working at your organization have meaningful and value-add work as well. This is not to say 100% of work will be such, however, a company which employs interns to do 'grunt work' will have difficulties in maintaining a meaningful intern program. To achieve this often requires significant work on the part of the intern managers, as oftentimes creating a position for only 3 months with meaningful and achievable project work is difficult. This is a key point to be aware of! A reputation for 'grunt work' internships will be difficult to shed and attracting top talent will be difficult.

Competitive Compensation. If you are attracting interns outside a geographically convenient location (such as in same city as school) you must provide some sort of compensation to attract talented interns. Keep in mind there are hundreds if not thousands of potential interns at large universities who will share this information with each other. This entire paragraph doesn't really apply for non-technical fields, however, or other fields where talent is not in demand. But talented engineering/software interns can find other offers which will pay competitively so unless you have a highly desirable industry/location, to attract top talent you will have to maintain competitive salary.

Coordinated HR/Administrative Program. If your organization has any significant number of interns, it is important to have coordination across the company and likely a single person responsible for "intern issues" or something similar. There are plenty of HR related questions which will happen, from "how do I get paid?" to "where should I live during my internship?" plus the huge number of questions during the offer/post-offer-but-before-school timeframe.

Adequate feedback. Keep in mind that most interns are not veteran workforce workers. They are recently coming from an academic environment - with perhaps 0-6 months office work experience - and part of this academic environment is constant feedback in terms of grades on projects, homework, and exams. While not strictly necessary, interns will require more affirmation than most full-time employees.

Consideration to project length. Most internships will be over the course of a summer or academic semester. Managers must ensure some if not all assigned project work is can be finished in the time frame. This is somewhat dependent on industry (for example Product Engineering tends to have long product cycle times, which may simply be impossible to fully meet).

Nice-to-haves (no particular order):

A company assigned mentor (outside managerial structure, this is key for such mentors)

Networking opportunities (coordinated by company)

Housing assistance (a minimum should be to help find housing for the intern to rent)

Official feedback/performance review system

Relocation assistance/sign-on bonus. Keep in mind even a $1,000 sign-on bonus is probably well less than 10% the total intern program cost but can be much more meaningful to a college student.

Small perks (company lunch/learns, etc) go a long way for essentially bribing college age students into having a highly positive opinion of your organization. A weekly intern networking lunch might cost the company $200 per intern over the course of summer yet have a ridiculously over-exaggerated effect on the intern's overall experience

A final presentation of sorts regarding project work. Most teams will probably do this, but an official structure from HR/management might help make it happen

Regarding prioritization, it is difficult to make blanket prioritization without knowing the size of the company or more specific (beyond just technical/engineering) nature of the work the intern will be performing. A large company with hundreds of interns likely has a much higher priority on maintaining a professional image, thus elements like a dedicated HR presence or more typical benefits packages may be more important than for a small company with only a few interns.

A final note which is critical when discussing the management of an intern program: interns are a lot of work for their day to day manager. Make sure every manager who is responsible for an intern (or, at the very least, their day-to-day mentor/manager) understands this. While some interns will enjoy a largely unmanaged internship, most people in their sophomore-junior years will not be anywhere near as effective as they potentially could be. Interns are most often new to your company, new to the "real world," new to projects lasting more than a few months, new to having a professional boss, and new to working an office job.

*Disclaimer: Most of my responses assume the internship motivation is primarily to evaluate potential employees for full-time hire and consequentially make the program appealing for top-talent types of future employees. This is not to say this is the only motivation behind creating internships as interns can create significant value, however, if a company is looking for cheap labor or programmers for a large short-term project, the priorities and items may change significantly

Additionally, these assume the internship is based in the USA. Internships elsewhere in the world have considerably different requirements (especially around compensation).*

+1 for the most part. Though I think that Competitive Compensation is more of a nice to have. If you have the other nice to haves then the results of your program will overshadow the pay. This is a learning position so a good experience is more important than making some money.
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ReallyTiredOfThisGameSep 19 '12 at 20:49

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@Chad it is, however, it would be difficult to build a program from the ground up, banking that you can attract top people without providing some incentive in the first place (because the top people will likely have other offers and options) and unless you have a totally awesome interview process or product it'll be hard initially to get that reputation
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enderland♦Oct 5 '12 at 14:52

+1 for the first two points. The biggest reason I have seen internship experiences fail is that no one takes the time to make sure they have something to do and walk them through how to do it. I would add that it is helpful for each intern to have a staff "mentor", which could be a Hi-Po or someone aspiring to enter management.
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JAGAnalystDec 20 '12 at 21:59

Now I can't provide feedback on the question from an employers perspective can I can comment on what I believe you can do in order for this arrangement to be successful from a intern's point on view. None of this information provided exclusively applies to intern's but I feel the effects of getting it wrong are amplified in such situations.

I have worked in two teams during my placement so have been able to analyze which worked well and what didn't in both environments.

Time

I think the first thing to consider here before we even begin to talk about what you can do once you have hired an intern and they have started their work placement, is whether you have the schedule and resources to spend a good amount of time with your intern.

If your company consists of 3-4 people who are all constantly having to work 10 hours a day to just about keep on top of your workload, then maybe this might not be the best option for you. In most cases, if you are hiring an intern from university, it is not uncommon for this job to be their first full-time position in their given field. They may have the academic knowledge for the job but may be unsure or lack the confident to utilize their skills in "the real world". This will therefore require some effort from your end to ensure that they are given direction and support.

If you hire an intern with the hope that they will be able to understand the purpose of the business and jump straight into the projects you're working on, you will either hit the jackpot or be spending a decent amount of your probably already small budget on a resource that you're not taking full advantage of.

Structure

Now that you've delegated some of your workload and have decided you will have time to spend with you intern, you need to ensure you have a solid, well structured plan of what your intern will be doing. You may be wanting to hire a software engineer so this role is pretty self-explanatory but take some time to decide exactly what projects they will be working on and when.

You might find that your intern speeds through the work you had planned for them within the first 5 months so you want to make sure you have enough work set out to cover the full employment period. On the other hand, its also to important to make sure you have tasks at varying levels so that if your intern's skills are at a slightly lower level or they require more time to learn a new task, you have the framework to compensate this.

I would expect your intern to be working pro-actively and be requesting for additional work once a previous task has been completed, but you shouldn't rely exclusively on this type of work ethic. Speaking from experience, there are only so many times you will nag your boss for additional work and set yourself tasks before you start browsing stack overflow (or writing and answer questions such as this).

Your intern is there to gain some real world experience, make an impression and hopefully find a place to work once they graduated. Give them the resources they need to do so.

Feedback

Now although your intern might look like they are coping well and say that they have understood the task, students (lets admit it guys) can sometimes think that because they've spend a couple of years at university, they know it all. This is not the case. They also might not have the confident to ask for more assistance.

Don't just ask "How are you finding it?", take 10 minutes every week to have a feedback session with your intern to discuss what work they have been doing, what they have been finding easy, what areas have been particularly difficult, if they've seen anything they would like to do more work on. This will not only been a good opportunity for you to keep track of their progress, but also allows you to create a better working relationship with your intern.

Taking steps to ensure your intern is confident in approaching you and feels like a member of the team, will positively correlate with work performance and job satisfaction.

Know when to trust your intern and take risks

I understand that taking on a intern, like any new member of staff, can be a big risk. There is the possibility that mistakes can be made that could potentially cost you a lot of time and money. So you need to be evaluating your intern's ability and know when its appropriate or whether you want to move them onto a bigger task (a great time to evaluate this is the feedback sessions).

If you decide you're willing to take the risk, make sure your intern is aware of this but show confidence in them. I can assure you there is nothing worse than having your manager logging you onto a server and quite literally shaking next to you as he shows you a task and continuously repeats "Don't delete anything". If you have your doubts, don't do it.

Remember this is not just a learning experience for your intern, but also for you. If you are only trusting yourself with all the responsibilities in your company, sooner or later your going to be overwhelmed. Providing your intern with tasks of a higher importance can not only allow them to prove themselves and be a bigger contributor to the team, but can also make you confidence in your judgement and decision making.

Conclusion

Now you might be thinking that all of these issues can be resolved if you have a proper management structure in place and some of this information may be very obvious to you. I have no prior experience or knowledge of how to effectively manage a team but these are just my observations. As stated before, this question comes for my own personal experiences as an intern and should stand an example of the importance of thinking about your situation and if this would be the best option for you to ensure a positive experience.